NAIROBI, Kenya, Feb 13 – The 2026/27 national budget is projected to increase by Sh173 billion to Sh4.7 trillion, up from Sh4.5 trillion in the 2025/26 financial year, according to the Budget Policy Statement (BPS) tabled in the National Assembly.
The increase is largely driven by higher recurrent expenditure, which is set to rise to Sh3.5 trillion from Sh3.3 trillion. Development spending is also projected to grow to Sh749.5 billion from Sh707.3 billion.
Allocations to county governments are expected to increase to Sh495.5 billion from Sh484.8 billion, while the contingency fund will remain unchanged at Sh2 billion.
The government plans to raise Sh3.5 trillion in revenue, slightly higher than the Sh3.35 trillion targeted in the current fiscal year.
To bridge the financing gap, it will borrow Sh890.4 billion domestically and Sh225.4 billion externally, bringing total borrowing to about Sh1.1 trillion.
Under the 2026–2029 Medium-Term Debt Management Strategy, the Treasury plans to source 82 percent of gross borrowing from the domestic market and 18 percent from external sources, mainly concessional loans and sustainability-linked bonds.
As of June 2025, Kenya’s public debt stood at Sh11.8 trillion, equivalent to 67.8 percent of GDP.
The latest Debt Sustainability Analysis indicates the debt remains sustainable but at a high risk of distress, with the present value of public debt at 65.3 percent of GDP.
